MOM: Fewer employees in Singapore received wage raises in 2016

In light of the tougher business conditions in 2016, and with a majority of firms having a flexible wage system which adjust wages according to business conditions, fewer employees received wage increases last year as compared to 2015, found the “Report on Wage Practices 2016” released by the Manpower Research and Statistics Department, Ministry of Manpower (MOM).

According to MOM’s report, between the last two years, the proportion of employees who received total wage increase also declined from 77% in 2015 to 75% in 2016.

At the same time, the proportion of profitable firms dipped from 79% (2015) to 76% (2016). This decline in profitable establishments was observed across major industries.

A larger proportion of establishments were found to have which incurred losses (2015: 21%, 2016: 24%). There was also an increase in those which were profitable, but did not do as well as the previous year (2015: 38%, 2016: 41%); while fewer firms were found to have similar profits as a year ago (2015: 29%, 2016: 23%), and the proportion of those that were more profitable was largely unchanged (2015: 12%, 2016: 13%).

With a majority of establishments citing company and staff performance as determinants of wage increases and bonuses in 2016, unsurprisingly, the report found that more profitable firms continued to give higher total and basic wage increases and larger bonuses – profitable firms gave at least 2 months in quantum on average, compared to loss-making firms (1.31 months).

Smaller proportion of establishments raised wages in 2016 (58%) than 2015 (64%), resulting in a slightly lower proportion of employees with an increase in total wage. Nevertheless, 75% of employees received an increase in total wage in 2016, compared with 77% in 2015.